Letter from MindArk's CEO, Q4 2023

Dear shareholders,

Without doubt, quite a lot has happened since the last CEO letter. In September, Unionen's magazine Kollega published an article about MindArk, stating that we are replacing staff with AI, a somewhat simplified picture compared to what we communicated on May 30, 2023. The day after, the article exploded in the media - MindArk was on the front pages of several newspapers and was mentioned in nationwide news coverage.

For the media, MindArk became perhaps the first Swedish societal example in the debate on how companies adapt their organizations by embracing artificial intelligence. This was perhaps particularly evident in certain media outlets that emphasized sensationalism without delving into MindArk's new strategy. AI will long be a divisive topic in societal debate, but for us, it is essential to leverage the tools available and manage our resources in a way that creates value for our shareholders, our users in Entropia Universe, and MindArk as a workplace.

All transformations within organizations take time to fully implement. In previous CEO letters, I have described what MindArk aims to achieve with the new strategy and the transition we are now undergoing. The short-term effect of the decision made at the end of May became evident in the Q2 report when all costs associated with the reorganization during the second quarter were visible. Therefore, we believe that the cost savings we anticipate will be reflected in future reports.

After an eventful summer, the organization as a whole has now been adapted to ensure that the new directives can be achieved. The work on transitioning the game engine to Unreal Engine 5 is ongoing; however, priorities and resources have been reallocated compared to before the transition. On the technical side, our developers are now working to remove the dependencies associated with the current game engine while simultaneously modernizing the components that are independent of the engine to create a modular and scalable technical solution. This approach also enables the implementation of new gaming systems and technical improvements today, which has a positive impact on Entropia Universe in the current game engine. As we intend to gradually move system by system to Unreal Engine 5, we reduce the risks without forfeiting many of the advantages both technically, in terms of marketing, and in terms of user experience. Thanks to this process, we can allocate additional resources to revenue-generating activities in the existing game engine today without altering the ambition for the future with an Entropia Universe in Unreal Engine 5.

Until next time, I wish you all the best, and as always, I sincerely thank you for the time you have taken to read this CEO letter.